Peter Schiff on Freedom Watch: You Cannot Own the Dollar or Dollar Denominated Debt!
Judge Andrew Napolitano, host of Fox News' "Freedom Watch," interviews free-market maven Peter Schiff about the true reality of what America and the dollar-exposed world at large can expect now that debt-ceiling charade is over.
As Judge Napolitano asks Schiff to start the program, "Republicans are busy patting themselves on the back for avoiding revenue increases in the debt deal, but this ignores what raising the debt ceiling means. It permits the government to borrow more to finance spending. This doesn't force the future Congress to raise taxes to pay for it, or does it?"
Peter's take: "You know, you said they may be patting each other on the back, but they are kicking the tax payers in the groin. You know this is a complete victory for the Democrats, there are no spending cuts whatsoever in this plan. And in fact Republicans are claiming there are no tax increases, that's a lie too because the enormous increase in the national debt represents a tax increase – we have to pay it back. ... We are going to pay for it with massive inflation. We're going to have to run the presses 24/7 to buy up all this additional debt, which is massive inflation, which is a tax on this generation. ... So if you want to avoid the biggest tax increase of all, you cannot own US dollars or any debt denominated in US dollars."
Posted by injun1 on 08/06/11 01:58 AM
Zen$$$ I really don't have an opinion on the $/AUD. I traded it one time last year and got my head handed to me. I do use AUD as a country gauge for commodity uses but that's really about it.
I try and stay with the Euro, dollar and the yen, where there's tons of liquidity. I am conducting more trading in the cross currencies then ever before. There's been a large swing in liquidity in those markets.
I did make a pretty good return the $/Baht this last month. It nearly paid as much as the yen move, so all in all it's been a pretty good 1/4. I try to average 1% per day. So if I can stay on that level it really adds up at the end of the year.
I don't have the same problem as I did when I was trading huge positions with a fund, I am a lot more light footed and can move in and out quickly where as with a fund it was like trying to move a battleship.
I was explaining to Dottie my concentration is really starting to take a narrow focus on Asia. It's a major concern of mine and I believe great trading opportunities are on the horizon. I think the dollar is going to do what the dollar is going to do. I simply look for behavioral disturbances that will force currency moves and position myself before the herd.
Heck, you know, you work eighty hours a week not to work forty!
Posted by Jeanna on 08/05/11 05:55 PM
It isn't a comfortable price we try to pick, but one that will not fall short before we can actually buy our materials and build the product. If we do not allow enough room in the price, the material costs from our vendors may go up again before we receive the customer's order. The bid price must try to account for an escalation due to time lag. And, many times we do not make it, and lose the profit we might have had. And, if we guess too high, and competition is guessing too low, we lose. Try keeping escalating costs juggled with competing business interests in an paper fiat system with no end in sight. It certainly isn't comfortable!
Posted by dotti on 08/05/11 05:26 AM
Zen$$$, sorry to hear of your travails. Guess you read my sad tale of woe. Fortunately, I don't depend on my trading prowess to be able to get along financially, but I sure admire you guys who can be successful at it! It has to be super when as George Peppard used to say: "I love it when a plan comes together."
Zen$$$, when I realized that I was throwing good money after bad in my little options scheme, it really messed me up. I allowed it to make me feel like I was a total failure in life! It took me a long time to accept that it just wasn't something that I had an aptitude for. I still have a sense of shame about it and am not sure why I was willing to post it here. Maybe it's part of a healing process.
Regarding how badly the GOV wants to wreck the dollar and Asia re same, I remember at the beginning of the "crisis", pols and talking heads stumbling all over themselves saying worst things that could happen to deepen the "recession":
nations competitively devaluing their currencies.
Now look what's happening and what's being proposed. Am I misremembering?
I think that they want to debase because that's the only way to deal with the debt issue--don't forget that banking institutions are stuck with lots of devalued "stuff", not the least of which is real estate.
Another benefit of a major shift is that any dislocation allows the "in crowd" to profit at someone else's expense.
injun1, I'm glad you were able to get in on that! Good for you.
I'm going to try to go back to sleep now. I don't have to watch the world markets. LOL But I am very interested to see what happens when the markets open US.
See you at the Daily Briefs with coffee in hand.
Posted by dotti on 08/05/11 05:13 AM
Hey, guys! Don't you two ever sleep?
Posted by Zenbillionaire on 08/05/11 03:11 AM
"It was TOUGH to hang with it!"
Must have been. I admit I'm not a trader and I've been trying for several years to work strategy. I really don't have the guts for trading anymore.
I'm wondering just how badly the US FedGovCo wants to wreck the dollar, and just how badly Asia wants to keep them from doing it. I'm not really trying to make money anymore, I gave that up a few years ago. All I want to do is hang on to what I have.
The USDAUD pair is getting dangerously close to 104, which CS says is a technical sell. Interested in your thoughts.
Posted by injun1 on 08/05/11 01:13 AM
We saw a coupling of metals and the stock market today is it a temporary and erratic move or do you think it's trying to tell us something?
Posted by injun1 on 08/05/11 12:58 AM
Hey ZEN$$$ how are you? I wondered what you were up to. Dottie and I were just chatting away without you. ha Yeah I caught that intervention move but it wasn't without sweating beads there for awhile. I caught another one about10 minutes ago of about 60 pips. So I guess it's been worth the sleepless nights. I just turned off the screens, I was starting to over trade and turned off the electricity, ha
I played that intervention right up to the end. I felt they couldn't stand the pain. I did have 1 margin call to fill while waiting but like you say its a cruel game. It was TOUGH to hang with it!
Posted by Zenbillionaire on 08/04/11 11:56 PM
"When you catch a two hundred point move like yesterday and each point is worth $600.00 you don't really have much of a conversation with people."
Well I'm glad somebody I know caught it, makes me feel a little better.
I dumped the dollar on Wednesday last week and had my ass handed to me on a plate today. I haven't slept in 48 hours. I am one unhappy camper because the whole reason I went back into the dollar last May was in anticipation of exactly this event. I was 4 days early. After three angels of the apocalypse walked by the door I said to myself "Self, that's it. We're done. Time to get out of Dodge". What can I say? No one expects the Japanese Inquisition.
God I hate this game.
Posted by Zenbillionaire on 08/04/11 11:43 PM
@ Peter Schiff
"We are going to pay for it with massive inflation. We're going to have to run the presses 24/7 to buy up all this additional debt"
But is this the way the game will play? Will Ben drop money from helicopters a third time?
Lets go out on a long skinny limb and consider what happens to the dollar if he doesn't. I know that would be a break from the past, but it's a gedankenexperiment.
If the Fed doesn't crank up the mill, the dollar gets very valuable in this environment. Perhaps that's what recipients of prior largess (bailouts) in the international banking family are counting on? Higher interest rates, a strengthening dollar?
The dollar just went up sharply today, around 5% according to my own private "basket". Could this be the beginning of a trend? Japan obviously thinks it might be.
Posted by dotti on 08/04/11 11:06 PM
Re: "How close are you guys to Wash D.C.? I have an office on Penn Ave. I get there and N.Y. about every 3 mos. Have you thought about options? If used properly that can be pretty lucrative if bought right. I know a kid in Chicago (broker) if you need a good one."
We're about as far from DC as we can be and still be in Virginia--SW corner. 1972-1974 worked on Capitol Hill--lowly job, but interesting. Saw sausage made. Lived in Woodbridge, VA back then.
RE trading options: I have two small trading accounts, Roths, and one of them I used for trading options. I didn't do very well. It's an embarrassment to me. I don't know whether I should ever try options again. I'm holding options right now on EGO (Eldorado Mining) that might possibly regain some value. I traded the options the way I make my art--raw emotion. Not good. Wish I had known your Chicago Kid a year ago!
I like the theory of options--limited losses, unlimited potential for gains. I hope nobody else reads here this late. I'd really hate to be exposing my ineptitude. Shuuuush. Don't tell.
Re: "When you catch a two hundred point move like yesterday and each point is worth $600.00 you don't really have much of a conversation with people. But I made that decision a long time ago."
I understand what you are saying, but I'd probably have to have SOMEONE that I could share that excitement with! That's a lot of zeroes. Congratulations. Maybe it's enough to share with the folks here at DB. You seem to have lots of good friends here.
RE: "Is there shale gas in your area? or just burly senators? What do you think of the shale gas operations up there? Is it good or bad?"
This is not something that I know about. Hubby is into nat gas and related plays. We are actually new to Virginia--only about 18 mos. there. Also, time down here trying to get moved out and get this place sold. May happen soon.
From what I can tell you have had a very interesting life. Thanks for sharing your experiences here at DB.
Posted by injun1 on 08/04/11 10:41 PM
Both. MBA(general business)Paralegal(water rights)No discipline but that's the way I see markets. I was hired for years, still am today for scenario developments. But I have an extensive background in real estate and that's what has proved most valuable.
Markets I guess really got in trouble today. I think the stock market needs to be cleansed like the real estate market. I agree silver is where the poor man can make it. I just don't stray too far from the fx market, besides it's just too lucrative. Trading is a very solitude business.
When you catch a two hundred point move like yesterday and each point is worth $600.00 you don't really have much of a conversation with people. But I made that decision a long time ago. I am at the age or getting there where I am thinking about moving one last time. I have a small ranch in Oklahoma (rez land) and one in Texas.(Houston)I'm single and never married so I think I am going to start gravitating towards home. Live in Scottsdale Az now.
How close are you guys to Wash D.C.? I have an office on Penn Ave. I get there and N.Y. about every 3 mos. Have you thought about options? If used properly that can be pretty lucrative if bought right. I know a kid in Chicago (broker) if you need a good one.
Is there shale gas in your area? or just burly senators? What do you think of the shale gas operations up there? Is it good or bad?
Posted by dotti on 08/04/11 10:01 PM
Re: "Ha, How do you see it?"
injun1, I was thrilled when you asked. I was prepared to write an essay detailing all the problems in the world. Then I realized that I just don't have it in me! The barn and the dodo just did me in.
I don't know what tomorrow will bring in the stock market. It has surprised me for two years now.
Re: gold. I think it will continue upwards, but there are things that could detour it. Margin regulations for one--as in what happened to the Hunt Bros. And yes. I do remember. Another would be an increase in interest rates, but that seems more and more unlikely to happen.
Selling by the central banks was a factor in keeping the price low for quite sometime; I think that the reverse may be true again for a while. I don't see how worldwide inflation can be avoided--especially since it will benefit the many sovereigns who are in deep dodo with debt. And i don't think that "austerity" is here to stay. It's much easier just to go with the flow and keep spending.
Well. I did almost an essay, didn't I! And I didn't think I had it in me.
I consider gold to be safer, but silver, being more volatile, could bring a better return--or a bigger loss. I still like the idea of silver being the poor man's gold.
Is behavioral finance a formal discipline or just something you picked up on your own here and there?
Posted by injun1 on 08/04/11 06:13 PM
Yeah, just general conversation, he had a winery up in the Napa region I guess. We actually knew a lot of the same people. Small world. He thanked me for the hop and off to SF I went.
I don't know. I quite honestly take a very macroeconomic view of the markets rather than a direct focus on the markets. I have become an expert on behavioral finance so that's a pretty broad look at things. But it also allows me to see things before the other fellow does.
I like gold for the long term hold.I am very leery of silver. We are in dangerous territory with silver price. Remember the Hunt bros! You could get a possible decoupling of gold and silver. Gold yes, Silver on the dip. Europe is troubled. Russia is in dip dodo. China is encroaching. Middle east is building more bubbles and the US is well....... Looks like gold time to me!Ha, How do you see it?
Posted by dotti on 08/04/11 05:29 PM
Re: "It was Francis Ford Coppola. If he would have asked I would have let him fly for free, I was going that way anyway. It was pretty funny. "
So did you two chat during the flight? I'm just curious.
Do you have an opinion on what the Market will do tomorrow? Curious about that, also.
Posted by injun1 on 08/04/11 04:48 PM
Ha! You don't know how funny that is. I was in Fresno California and I was going to San Francisco by charter aircraft. This guy came in and had to get to Napa, Ca. and I had reserved their last aircraft. In order to hop a ride with me they got him to pay all my charter cost plus my hotels room at the Fairmont and I never said a word.
It was Francis Ford Coppola. If he would have asked I would have let him fly for free, I was going that way anyway. It was pretty funny.
Posted by dotti on 08/04/11 04:40 PM
If you save that $2,000 for a couple of years (in cash), you can buy yourself a really nice meal. LOL
Guess you have lots of stamps on your passport!
Sorry I can't let you borrow my private jet for the trip. Mick Jagger already has it reserved.
Posted by injun1 on 08/04/11 04:33 PM
I was thinking about that. I have an office in Manilla that has high speed capabilities but I am going to Cebu and don't have an office there, although they do have very good communication infrastructure now.
When traveling around Southeast Asia the trick is to get to Manilla and fly to China or Thailand from there because it's not considered international travel if my ticket originates from Manilla. Saves about $2,000 in taxes, fees etc.
Posted by dotti on 08/04/11 04:21 PM
Glad you're okay. even made a couple of bucks!!! Congrats.
My personal acct is quite small, but everything is related to GLD and SLV, so I lost, but not so much.
Regarding the congressmen: Found one mummified big guy--of the wharf type, possibly a senator.
But mostly these characters just drop their load of dodo and leave somebody else, like me, to clean it up. Know what I mean?
At least my kids and grandkids won't have to deal with it.
I'm curious about your research. Are you going to keep your friends here at DB posted?
Posted by injun1 on 08/04/11 04:14 PM
Yeah, made a couple of bucks in the market. I am getting ready to go to Southeast Asia for about two weeks. I have to go put my boots on the ground and do some research. That region concerns me at the present time.
Did you get all those congressmen out of your barn?
Posted by dotti on 08/04/11 04:06 PM
When gov steals
A. have a face to face meeting with that neighbor.
And who would be the representative of the government that you would meet with? Your Congressman????
B. call the authorities and prosecute
There was a famous movie that my son loved called "Ghostbusters". The theme song said: "Who you gonna call?" The answer of course was "Ghostbusters". What's the answer re gov?
C. go next door and beat the living crap out of him
It's a nice thought. LOL. But a sure way to end up in jail for a really, really long time.
Maybe you need to think of it this way: If your neighbor who stole your money is the chief of police who routinely beats his wife....
Made me smile just thinking of A, B, or C
How are you today? Okay?